WORLD TRADE  
ORGANIZATION  TN/MA/W/95 
7 December 2007 
 (07-5440) 
Negotiating Group on Market Access Original:   English 
  
 
MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS 
 
Joint paper on Revised Draft Modalities fo r Non-Agricultural Market Access (NAMA
) 
 
Communication from Canada, the European Comm unities, Iceland, Japan, New Zealand, Norway, 
Switzerland, and the United States 
 
  The following communication, dated 5 December 2007, is being circulated at the request of 
the delegations of Canada, the European Comm unities, Iceland, Japan, New Zealand, Norway, 
Switzerland, and the United States. 
 
_______________ 
 
  This paper responds to the request by the Chairman of the Negotiating Group on Market 
Access for written contributions by Members ahead  of his revision of the NAMA Draft Modalities 
text. It also responds to the calls for convergen ce made by Director General Lamy, as the co-sponsors 
of this text are convinced that the basis of our work  must be the Chair's July 2007 text (hereafter, “the 
Chair’s text”). The following points build on th e objectives contained in the Doha Ministerial 
Declaration, Annex B of the 2004 July Framewor k Agreement and the Hong Kong Declaration, and 
indicate the elements that co-sponsors consider as necessary for NAMA modalities to be sustainable 
within the broader context of the Single Undertaking.   Co-sponsors of this text wish to emphasise that in a constructive spirit, they are prepared to 
engage in discussions on specific problems concerni ng particular developing Members. They are 
confident that focused and specific solutions can be accommodated as long as, where necessary to 
preserve the overall balance struck by the figures cont ained in the Chair's text, there are transparent 
trade-offs.  1. Signatories to the Doha Declaration expressed th eir determination to “maintain the process of 
reform and liberalisation of trade policies, thus ensuring that the system plays its full part in 
promoting recovery, growth and development”.  The NAMA modalities need to deliver real market 
access gains for all Members. Ministers in Ho ng Kong instructed negotiators to achieve a 
"comparably high level of ambition in mark et access for Agriculture and NAMA". Leaders 
representing half of world trade insisted in Sept ember that the round must achieve an "ambitious, 
balanced result that delivers real and substan tial market access improvements for agricultural and 
industrial goods and for services and real and subs tantial reductions in trade-distorting subsidies"
1. 
                                                      
1 APEC Leaders’ Statement on the WTO Negotiations of 9 September 2007. APEC Economies are: 
Australia, Brunei Darussalam, Canada, Chile, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Philippines, Russi a, Singapore, Chinese Taipei, Thailand, United States 
and Viet Nam. TN/MA/W/95 
Page 2  
 
  2. Ministers agreed in Hong Kong to adopt a Swiss formula with coefficients at levels which 
shall inter alia :  
- reduce or as appropriate eliminate tariffs,  including the reduction or elimination of 
tariff peaks, high tariffs and tariff escala tion, in particular on products of export 
interest to developing countries; and  
- take fully into account the special needs and interests of developing countries, 
including through less than full reciprocity in reduction commitments. 
3. There are no prescriptions for assessing the outcome  of negotiations. Each Member will make 
its own judgment. Some of the criteria that will be  followed by the co-sponsors of this paper include: 
reduction or elimination of tariff peaks, high tari ffs and tariff escalation; the number of dutiable 
applied lines cut and the depth of the cut; reductions in  bound duties; end rates; results of participation 
in sectoral initiatives; binding coverage ; and results on non-tariff barriers. 
1. Formula 
4. The Draft Modalities of July 2007 include a Swiss formula with two coefficients to be applied 
by at least 41 Members. The coefficient for developed Members ranges from 8 to 9, while the 
coefficient for developing Members ranges from 19 to 23. The difference in these two ranges of 
coefficients amply reflects the principle of less th an full reciprocity. Current ly, the average applied 
tariff for developing Members applying the formula is just more than twice the average rate applied 
by developed Members. Under any scenario in the Ch air’s text, this ratio would widen so that the 
average end rate for developing Members applying the formula would be more than three times the 
average end rate for developed Me mbers. The pattern is similar for bound rates. Whatever the final 
choice of coefficients, they will have to deliver  on both requirements agreed by Ministers in Hong 
Kong. 
2. Flexibilities 
5. Flexibilities for developing Members are another form of less than full reciprocity that is 
provided in the Chair's text. Developing Member s have long requested that flexibilities under 
paragraph 8 be treated as a standalone element. In response to such requests, the brackets around 
those figures have been removed in the Chair’s te xt. Developing Members applying the formula will 
thus be able to apply no cuts or to keep items unbound up to 5% of their tariff lines and 5% of import 
value; alternatively they can apply half-formula cu ts to 10% of lines and 10% of import value. In 
recognition of the valuable flexibility offered by these provisions, the Chair's text also includes the 
possibility for developing Members renouncing these flexibilities to benefit from a higher coefficient 
increased by three additional points. 
6. Flexibilities allow high tariffs to be shielded, making it harder to meet the requirement to 
reduce or eliminate high tariffs, tariff peaks and ta riff escalation. In addition to reducing ambition, 
flexibilities cause a high degree of uncertainty. C onsequently, Members must ensure that the 
application of such flexibilities does not r esult in the exclusion of whole sectors.  
7. Calls to expand flexibilities on a generalised basis are not sustainable, threaten to close off 
even more sectors that may be of interest to smaller and developing Memb ers, and would further 
diminish trade and development opportunities for the majority of Members. Proposals by some 
Members to expand flexibility on the basis of their membership in customs unions have raised serious 
systemic concerns amongst co-sponsors of this pa per. Such proposals would imply that regional 
agreements have priority over the multilateral syst em. Co-sponsors of this paper strongly reject such  TN/MA/W/95 
 Page 3 
 
 
  an approach. Countries join customs unions as a policy choice and there are existing WTO provisions 
that address the implications of such a choice. 
8. Given the large gap between bound and applied duties in most developing Members, the 
provision in the 2004 July Framework Agreemen t that reductions shall commence from bound duties 
also results in lower applied rate cuts for de veloping Members as compared to most developed 
Members where bound and applied duties practically coincide.  
9. Special and differential treatment is also refl ected in the implementation periods proposed by 
the Chair's text. Developing Members applying the formula shall benefit from a period that is twice 
that of developed Members. Given the high numbe rs in the range for the developing Members 
coefficient included in the Chair's text of last July, there will be very few cuts or no cuts into applied 
rates for a significant proportion of developing Member s’ tariff lines. The relatively limited cuts into 
applied rates and the length of staging mean that market access improvements are likely to occur only 
late in the implementation period, perhaps as late as 2016 or 2017. On the other hand, current applied 
rates in developed Members would start to be  cut from the first year of implementation. 
10. The Draft Modalities further refine provisions fo r special and differential treatment, including 
less than full reciprocity, by:  
- providing a total exemption from any commitments for LDCs, Low Income 
Economies in Transition and Very Recently Acceded Members.  
- excluding from formula reductions devel oping Members that have bound less than 
35% of their tariffs ("paragraph 6" countr ies), and developing Members with a share 
of world NAMA trade less than 0.1% (S mall, Vulnerable Economies – SVEs). For 
these two groups the Chair's text offers signi ficant flexibilities in the form of target 
averages that do not require any effect on duties currently applied by these Members. 
We are supportive of the Chair's modalities for these two groups and willing to consider adjustments in the context of an overall satisfactory outcome in the NAMA negotiations. 
11. As regards recently acceded Members (RAMs), we c onsider the Chair's text sufficient and in 
keeping with the Ministerial mandates. 
*      *      * 
12. Co-sponsors believe that all the elements above  will help achieve a level of commitments 
sustainable and satisfactory for all Members with defensive or offensive interests. 
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